Finance · Profile from Finance Research Companion
Washington Mutual, Inc. (WaMu)
A Seattle savings institution founded after the Great Seattle Fire of 1889 that, under Kerry Killinger from 1990, bought its way through more than thirty thrifts and mortgage companies to become the largest US savings and loan, a top-tier mortgage lender and servicer, and a self-styled "Wal-Mart of banking"; that then bet on option ARMs, subprime lending through Long Beach Mortgage and a high-risk lending strategy at the top of the housing bubble; and that was seized by the Office of Thrift Supervision on September 25, 2008, 119 years to the day after its founding, after ~$16.7bn of deposits left in ten days. With ~$307bn of assets it remains the largest bank failure in US history. JPMorgan Chase bought the bank from the FDIC for $1.9bn; the holding company's Chapter 11 case ran until 2012 and its reorganised shell became part of Mr. Cooper, which Rocket Companies bought in 2025.
At a glance
- Founded
- September 25, 1889, Seattle, as the Washington National Building Loan and Investment Association, after the June 6, 1889 Great Seattle Fire
- Founders
- A group of Seattle business figures forming a building-and-loan association to finance rebuilding (individual names not confirmed here, verify)
- Headquarters
- Seattle, Washington (WaMu Center, opened 2006)
- Ownership / structure
- Mutual savings bank until a 1983 stock conversion; Washington Mutual, Inc. (NYSE: WM) holding company owning federal savings banks (Washington Mutual Bank, Washington Mutual Bank fsb) supervised by the Office of Thrift Supervision (OTS), with the FDIC as insurer and back-up supervisor
- Leadership
- Lou Pepper (CEO 1980s); Kerry Killinger (CEO 1990–September 8, 2008; chairman until June 2008); Steve Rotella (president and COO from 2005); David Schneider (president of home loans); Alan Fishman (CEO September 8–25, 2008)
- Segment and clients
- Retail bank and thrift: deposits, branches, mortgages (origination, servicing, portfolio lending), home equity, subprime (Long Beach Mortgage), credit cards (Providian), multifamily lending
- Scale at peak
- Total assets peaked at ~$330bn (30 Sep 2007), ~$328bn at end-2007 and ~$320bn at 31 Mar 2008 (WMI 10-Q, holding company); ~$307bn and ~$188bn deposits at seizure; ~2,200+ branches in 15 states; ~43,000 employees (reported, verify)
- Profit
- Peak net income ~$3.9bn (2003, verify); 2007 loss in Q4 (~$1.87bn); 2008 losses of several billion dollars (Q2 2008 ~$3.3bn, reported)
- Failure
- Seized by OTS September 25, 2008; FDIC appointed receiver and sold the banking operations to JPMorgan Chase for $1.9bn; no cost to the Deposit Insurance Fund; WMI filed Chapter 11 September 26, 2008
- Signature moves (incl. failures)
- Founding after the Seattle fire (1889); stock conversion and Killinger's acquisition era (1983–90s); California thrift acquisitions (1996–98); mortgage platform build (2001–02); higher-risk lending and option ARMs (2005); Providian (2005); TPG-led $7bn capital infusion (2008); seizure and sale to JPMorgan (2008); WMI bankruptcy settlement and Mr. Cooper (2012–2025)
9 strategic moves analysed
Each one gets a full strategy file in the companion: context, the decision, the financing, what happened, and the lesson.
1889
Founding After the Great Seattle Fire
Founding
1983
Stock Conversion and Killinger Era
IPO (mutual-to-stock conversion) / leadership change
1996
California Thrift Acquisitions
Acquisition (three large all-stock thrift deals)
2001
Mortgage Platform Build
Acquisition (series of mortgage-company and thrift deals)
2005
Higher Risk Lending and Option ARMs
Pivot (shift of lending mix toward higher-margin, higher-risk mortgages) — a strategic failure
2005
Providian Card Acquisition
Acquisition
2008
Seizure and Sale to JPMorgan
Failure (regulatory seizure and FDIC sale)
2008
TPG Capital Infusion
Funding round (private-equity-led recapitalisation) — a failed rescue
2012
WMI Bankruptcy Settlement and Mr Cooper
Bankruptcy / restructuring (global settlement, reorganisation, reverse merger)